) has completed the earlier announced divestiture of its
performance coatings business to private equity firm Carlyle
Group for $4.9 billion in cash. The company, in Aug 2012,
announced its plans to divest the unit which supplies vehicle and
industrial coating systems.
The sale will allow DuPont to better focus on accretive
businesses like agriculture and nutrition, bio-based industrials
and advanced materials. Beginning with third-quarter 2012
results, the performance coatings unit has been classified as
discontinued operations and is excluded from the company's
continuing operations results, on a retroactive basis.
DuPont plans to utilize a part of the proceeds from the sale to
repurchase shares worth $1 billion during first-half 2013.
Moreover, it expects to use the remaining portion of the proceeds
to reinforce its balance sheet, which will enable it to invest in
selective growth opportunities.
DuPont also noted that it will continue to serve the automotive
industry and expects to generate over $3 billion in revenues from
advanced materials sold to the auto industry annually.
DuPont, on Jan 22, posted adjusted earnings from continuing
operations (excluding the performance coatings business) of 11
cents per share for fourth-quarter 2012, beating the Zacks
Consensus Estimate by a couple of cents. Net sales were
essentially flat year over year at $7,325 million but exceeded
the Zacks Consensus Estimate of $7,253 million.
DuPont is witnessing strength in its agriculture and food
businesses. Moreover, it should continue to benefit from the
synergies of Danisco acquisition. However, the company is exposed
to weakness across titanium dioxide and photovoltaic markets, raw
material cost inflation and currency headwinds.
DuPont currently holds a short-term Zacks Rank #3 (Hold).
Other companies in the chemical industry with favorable Zacks
). While both Arkema and BASF retains a Zacks Rank #1 (Strong
Buy), Air Products holds a Zacks Rank #2 (Buy).
AIR PRODS & CHE (APD): Free Stock Analysis
(ARKAY): ETF Research Reports
BASF SE (BASFY): Free Stock Analysis Report
DU PONT (EI) DE (DD): Free Stock Analysis
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